OMB sets rules to spur innovations

The Office of Management and Budget likes the idea of running competitions to spur innovation.

It held out the prize of winning the Securing America Value and Efficiency (SAVE) Award to meet President Obama and having the idea be included in the fiscal 2011 budget request.

The SAVE Award received more than 38,000 entries, and the winner, Nancy Fincher of the Veterans Affairs Department, earned her trip to the White House to meet with Obama in December.

VA, the Army and NASA also have held or are holding competition to figure how to improve how their agencies work.

OMB is expecting more agencies to use competitions in the future and issued guidance yesterday detailing how they could work.

"The Administration believes that prizes and challenges have a number of potential benefits," says Jeff Zients, OMB's deputy director for management and chief performance officer.

Zients says these benefits include:

• Establishing an important goal without having to choose the approach or the team that is most likely to succeed;
• Paying only for results;
• Highlighting excellence in a particular domain of human endeavor to motivate, inspire, and guide others;
• Increasing the number and diversity of the individuals, organizations, and teams that are addressing a particular problem or challenge of national or international significance;
• Improving the skills of the participants in the competition;
• Stimulating private sector investment that is many times greater than the cash value of the prize;
• Furthering a agency's mission by attracting more interest and attention to a defined program, activity, or issue of concern; and
• Capturing the public imagination and change the public's perception of what is possible.

The memo lists six types of prizes that agencies could consider, including Exemplar prizes, which honor past achievements; Point solution prizes, which aim to reward and spur development of solutions for a particular, well-defined problem; and Market stimulation, which try to establish the viability of a market to address a potential market failure, mobilize additional human talent and financial capital to jumpstart the development of a new industry, or change public perceptions about what is possible.

"Agencies should plan appropriately for all stages of prize development and administration," the memo states. "The design of a prize and the award process often receive the bulk of sponsors' attention, but effective sponsors devote extensive time to defining the broader goals of the prize and analyzing the motivations of participants before they consider the prize type or the purse. Agencies also should take care to plan for the post-prize phase, reinforcing the impact of an award with other investments and follow-up activities."

The memo also goes into the legal authorities that exist for agencies to offer competitions and prizes. It also discusses how agencies could use procurement or grant authorities to run competitions.

OMB says it will set up an online platform for prizes and challenges in 120 days.

"This platform will provide a forum for agencies to post problems and invite communities of problem solvers to suggest, collaborate on, and deliver solutions," the memo states.

The General Services Administration also will provide governmentwide services to share best practices and assist agencies in developing guidelines for issuing challenges. GSA also will develop as soon as possible "a contract vehicle to provide agency access to relevant products and services, including technical assistance in structuring and conducting contests to take maximum benefit of the marketplace as they identify and pursue contest initiatives."

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